An Aerospace Leader Bounces Back with a Three-Part Transformation
In the pandemic’s wake, the company quickly repositioned its supply chain for future growth and doubled down on customer loyalty.
The aviation industry faced an existential threat during the Covid-19 pandemic, with global air travel dropping around 70%—the largest decline in history. As a result, airlines and aerospace manufacturers experienced an immediate and critical cash crunch.
One manufacturer of complex aircraft parts for commercial and military customers sought a new strategy to address these challenges head on, while positioning itself for future growth. We helped AerospaceCo* develop a three-part strategy focused on identifying and implementing cost savings, stabilizing operations with a new supply chain strategy, and reinvesting in customer relationships.
With this new approach, AerospaceCo was able to stabilize its operations, resulting in around 5%–10% of savings in the short term, with a long-term plan to grow savings by 10%–20%. And the company was able to solidify customer loyalty, laying the foundation for the passenger travel rebound.
Amid pandemic-induced disruption, AerospaceCo needed a short-term, rapid-response plan to reduce costs. We helped the company identify areas across its supply chain and the broader business to reduce costs quickly and improve profitability. The company integrated our cloud-based transformation management tool, ARC, into its operations, to help manage multiple workstreams and identify areas to make changes quickly. With these cost reductions and tools in place, AerospaceCo could adapt its business to this new world.
When reviewing supply-chain pain points, AerospaceCo realized it needed to optimize material sourcing and operations to succeed in the long term. Working alongside the company’s leaders in this area, we deployed a rapid diagnostic to identify the greatest areas of inefficiency and volatility in their operations. The diagnostic helped shape a decade-long plan focused on material procurement, make-vs.-buy decisions, facility improvements, and digital strategy. AerospaceCo is now on track to stabilize its operations and grow savings.
The pandemic prompted AerospaceCo to pursue a new commercial excellence strategy focused on boosting customer satisfaction. As its customers faced financial challenges due to air travel disruption, AerospaceCo sought ways to ease the burden on them. We helped the company identify cash flow timing as an opportunity to achieve this goal. By bearing the burden of less revenue in the short term, AerospaceCo could generate more revenue down the road and increase customer loyalty. Discounts were rolled out for customers to evoke a coupon mentality. AerospaceCo also introduced new products that were tailored to meet customers where they were during a time of economic uncertainty.
The disruption from the pandemic has not fully abated, but by triggering a steep decline in business followed by a rapid increase, it inspired AerospaceCo to make key improvements in operations, supply chain resiliency, and commercial excellence. With long-term strategies and tools in place, the business is positioned to support the return of air travel and associated increase in demand for their products in a pandemic-altered world.